Things are hotting up in the Niger Delta again and once again Shell finds itself at the centre of the vortex of violence and conflict.
On Saturday the company had to shut three oil flow stations in the Delta region after a pipeline was sabotaged by armed gun-men.
It was the same day as Nigeria’s militant group Mend said it was ending the truce it declared last October, declaring an all out war on the oil companies and the government.
In a statement Mend told the oil companies to leave the Delta immediately, although it denied being directly involved in the latest attack.
In an e-mailed statement MEND said: “It was certainly a response to our order to resume hostilities by one of the various freelance groups we endorse.”
It could have been a perfect co-incidence, but the day before the sabotage incident there was a really interesting development when Shell did exactly what Mend wants.
It offloaded some of its assets. Press reports say that Shell’s subsidiary in Nigeria, the Shell Petroleum Development Company of Nigeria Limited (SPDC), agreed to transfer its interest in three production licences to a consortium led by two Nigerian companies.
The buyer is Seplat Petroleum Company Limited, a company jointly held by two Nigerian firms, Platform Petroleum Limited and Shebah Petroleum Development Company Ltd, along with Maurel & Prom of France.
The chief executive officer of Platform Petroleum, Austin Avuru has called the deal a “landmark transaction for a Nigerian company.”
According to the oil giant, the licenses cover Shell’s 30 percent interest in 3 oil leases covering approximately 2,650 square kilometres in the north western Delta. The area includes about 30 wells with a production capacity of approximately 50,000 barrels of oil equivalent per day.
So this could be the start of Shell’s slow off-loading of $5 billion of its onshore and shallow water assets as it seeks to extract itself from 50 years of violence and conflict.
And the local Nigerian companies think they can naturally get on better with the people of the Niger Delta than Shell.
“We know that security is the major risk that we’ll face, it’s also a risk we think we can manage better than the multinationals. So it’s part of the reason we were considered to come in,” Mr Avuru said.
Whether they do a better job than Shell remains to be seen.
It can’t be that difficult.
Why threaten a company that is doing what you want done? It does not make sense. It would easily cause them to rethink the strategy or get less for the assets if they continue to sell them.